Glendale Mayor Scruggs makes a case for letting Coyotes go

Glendale has been cranking out budget scenarios to show where the city would stand considering different variables, such as keeping or losing the sales-tax hike and keeping or losing the Phoenix Coyotes.

It's the latter that has caught the attention of Mayor Elaine Scruggs.

No immediate cuts would be needed, according to one scenario that assumes the city keeps the tax hike but loses the hockey team that plays at the city-owned Jobing.com Arena.

Scruggs highlighted the no-cuts scenario at this week's council workshop and called on council members to rethink the Coyotes deal.

The mayor said handing out $71 million to the team as proposed in the next five years would mean city employees would lose jobs and services would be cut.

The mayor said that wasn't acceptable. She added she would rather keep popular city festivals that are in danger of being cut than pay millions to keep the Coyotes.

"I don’t want to turn off the lights in Glendale," Scruggs said, suggesting the hockey and concert arena could attract other events that would keep visitors at Westgate City Center, the nearby shopping and restaurant complex.

A council majority, including Joyce Clark, Yvonne Knaack, Manny Martinez and Steve Frate, favors a deal with potential team buyer Greg Jamison to keep the team in Glendale. The deal requires the city to pay an average of $15 million annually for Jamison to manage the arena over the next 20 years.

Knaack said she stands by the vision for the city’s sports-and-entertainment district.

“It's costing us, but I'm looking down the road, the long haul,” she said. “Having the Coyotes is what the vision was for the whole area.”

The zero-budget-cuts scenario that captured the mayor’s interest relies on the assumption that the city could find an arena manager for $6 million a year.

It’s unclear how realistic that figure might be. Interim City Manager Horatio Skeete has said it could vary by a few million, but he’s stuck with the figure in his scenarios.

Scruggs called for the city to put the arena management out to bid, something that has not been done, so that city leaders would know for certain.

The discussions come as Glendale voters on Nov. 6 will decide on a citizens initiative to repeal a 0.7 percentage point tax hike implemented in August.

The council had approved the hike to try to balance this year’s general fund operating budget after laying off about 50 employees.

The temporary tax hike is expected to bring in about $25 million a year for five years.

Skeete has presented four scenarios, all of which assume the city is able to refinance a portion of its debt. The refinancing is largely for the $200 million debt on Camelback Ranch-Glendale, the spring-training ballpark. City leaders expect to be able to refinance with or without the Coyotes, although Skeete said the city might get a better interest rate if the team stays.

Here’s a look at the city’s latest four scenarios:

>> If the tax hike and team stay: The city would need to trim $6 million from the general fund.

>> If the tax hike stays and the team leaves: The city would not immediately need to cut from the general fund, although as with every scenario, the city would have to wean itself off the tax hike before it sunsets in 2017.

>> If the tax hike goes away and the team stays: The city would need to cut $29 million from the general fund.

>> If the tax hike goes away and the team leaves: The city would need to cut $23 million from the general fund.

City leaders say the most severe cuts would hugely impact city services, including closing two of three libraries, shuttering an aquatics center and losing an additional 250 positions, or about a quarter of city staff. The layoffs would impact police and fire employees.

Councilwoman Clark maintains keeping the team is in the city’s best interest.

Even if the Coyotes go, Clark pointed out, the city for the next two decades still must pay its construction debt on the arena, which is about $10 million annually.

The Coyotes, and the money the team generated at the arena by attracting visitors to Westgate, were a big way the city anticipated paying that debt.

Skeete has estimated the team’s exit would mean about $2.5 million in direct losses to the city. The hit to Westgate is tougher to gauge. Skeete’s scenarios do not attempt a guess.

What is known is that over five years, from fiscal 2007 to fiscal 2011, the city collected an average of $3.7 million annually in sales tax from Westgate and the arena. Certainly a portion of those sales taxes stemmed from Coyotes fans visiting Westgate during the roughly 40 games played at the arena.

Clark worries Westgate would suffer without those fans.

“It isn't a matter of the Coyotes,” Clark said. “It's an attempt to keep the arena viable to keep Westgate viable.”

The mayor noted that the Tanger Outlet Mall, opening next month, would help Westgate.

David Sotolov, senior vice president of iStar Financial, the investment group that owns Westgate, recently told the Republic that the Coyotes provide an anchor to the shopping-and-entertainment district, along with the Cardinals’ football stadium and the soon-to-open outlet stores.

Over the past year, the Westgate owners have launched scores of free events, including ice skating and live music, to increase traffic, and they have increased promotion and advertising.

All of these efforts take some weight off of the Coyotes as the main draw for the site, but Sotolov said the team remains valuable to Westgate.

“We’d like to see the Coyotes stay,” he said. “We’ve developed a great relationship with them. Our center provides an incredible fan experience, and they certainly draw people to the center.”

However, Sotolov added that he believes that with Tanger and the promotional efforts, Westgate would remain stable even if the Coyotes left.

Posting a comment to our website allows you to join in on the conversation. Share your story and unique perspective with members of the azcentral.com community.

Comments posted via facebook:

► Join the Discussion

azcentral.com has switched to the Facebook comment system on its blogs. Existing blog comments will display, but new comments will only be accepted via the Facebook comment system. To begin commenting, you must be logged into an active personal account on Facebook. Once you're logged in, you will be able to comment. While we welcome you to join conversations, readers are responsible for their comments and abuse of this privilege will not be tolerated. We reserve the right, without warning or notification, to remove comments and block users judged to violate our Terms of Service and Rules of Engagement. Facebook comments FAQ

Join thousands of azcentral.com fans on Facebook and get the day's most popular and talked-about Valley news, sports, entertainment and more - right in your newsfeed. You'll see what others are saying about the hot topics of the day.